No one said it was going to be easy when United Airlines bought all of Pan American's Pacific and Asian routes for $750 million in February, 1986.
In the uncertain, often unfriendly economic skies of the airline business, there are always problems in becoming a major international carrier, especially when a company attempts to fly 170 weekly flights to 13 cities in 10 countries. But it seems that no one at United anticipated the full impact of these problems until after the Pan Am route transaction was complete.
Serious challenges faced United almost immediately.
First, could United effectively compete on these routes when it came to service in flight? Carriers such as Singapore, Japan Air Lines and Cathay Pacific had firmly established reputations for excellent flight service.
On most 747 flights the Asian airlines carried up to 18 flight attendants. United (as Pan Am had done before it) staffed their aircraft with only 10 attendants.
Could United compete with cheap air fares? It is almost a tradition in Asia that many airlines "dump" discount tickets on the open market to travel agents, who then sell them to the public at discounts way below even published discount fares. Officially, each airline denies taking part in the dumping game, but that's tantamount to Claude Rains appearing "shocked" to discover that gambling was occurring in Humphrey Bogart's watering hole in Casablanca, shortly before collecting his winnings.
Then there was the touchy subject of the planes themselves.
Most of the 17 planes bought from Pan Am were in need of major mechanical work. According to some United executives who don't wish to be identified, the airline miscalculated when it bought the planes. United assumed that the turnaround time--the time necessary to refurbish the aircraft, repaint them and bring them up to United's standards of safety and maintenance--would be roughly a third of the time it actually took.
As a result, United quickly went from bad to worse in the Pacific and Asia.
In the area of service, the airline had been outdistanced.
"We quickly found out," says Stephen Lo, an assistant vice president for United based in Hong Kong, "how much passengers in Asia and the Pacific had been spoiled by other carriers. They boarded our flights looking for great service, and it wasn't what they were used to."
Service and amenities were in need of an overhaul. In first-class, seats were not as wide, nor did they recline as far as seats in other carriers. Business-class seats could hardly match the competition in size or comfort. And food service was nothing to write home about, unless you were considering an angry letter.
Flight scheduling was a disaster. Flights were often delayed, and the number of flights that canceled due to mechanical problems grew at an alarming rate.
At one point one in every five United flights in the Pacific and Asia canceled. "It was intolerable for us," says Lo, "and for our passengers. It wasn't long before our passengers started canceling on us."
It was clear that something had to be done--and fast.
Additional $100 Million
United quickly invested an additional $100 million in start-up costs to refurbish and maintain aircraft. The airline also moved its Pacific headquarters from Chicago to Honolulu.
United then began a major evaluation of its service in flight. A massive staff training program began, with an emphasis on the "cultural sensitivities" of passengers. There was even a seminar on personal grooming and appearance.
Sleeperette seats were installed in first class. State-of-the-art electronic headsets were ordered for first class and business class.
Passengers in first class and business class got new and improved amenity kits. The airline bought new glassware and linen, and larger blankets. More than 150,000 new first-class china dinner plates were ordered, along with new silverware.
United recently tested a new idea on flights to Hong Kong and the South Pacific--a foreign exchange service. Intercash allows passengers to buy small amounts of foreign currency en route, at an exchange rate often cheaper than what they'll find once they land.
The test was such a success that United will offer the service on all of its transpacific flights.
Then there's a new food service, with a gourmet cuisine. Menus will be upgraded and new items added every 60 days, and international wine selections have been added to first class and business class.
The airline added more flight attendants on all of its flights--13 cabin staff on 747SP (special performance) flights and 16 attendants on regular 747s. Special interpreters are on flights to and from Hong Kong, Japan and Korea. On inter-Asia flights, the flight crews are all Asian.
Maintenance programs were accelerated and mechanical inspections increased to raise each aircraft to United's operating and safety standards.
In April, United took delivery of two new 747s to use on its nonstopTokyo-to-New York service. Four more 747s are on order.